Mohegan Sun inches closer to Massachusetts casino license

Palmer, Mass. — If Mohegan Sun wins the western Massachusetts casino license it needs to build a $1 billion destination resort, it promises to provide this town with more than $16 million a year in "mitigation" fees, property-tax offsets and revenue sharing — more than $1,200 a year for every man, woman and child who lives here.

And that doesn't include nearly $3 million in upfront payments, more than $40 million in infrastructure improvements associated with the project and an additional $1 million or so a year in hotel and meal taxes.

In the first year alone, the payments would total nearly $21 million.

Such were the numbers bandied about here Thursday at the long-awaited signing of a "host community agreement," which spells out the Mohegan Sun Massachusetts partnership's commitments to the town. Mitchell Etess, the Mohegan Tribal Gaming Authority's chief executive officer, and Charlie Blanchard, Palmer's town manager, signed the document before an appreciative audience at the public library.

Palmer's Town Council is expected to approve the agreement Tuesday night and set the date of a binding townwide referendum. Mohegan Sun has asked that the vote be held Nov. 5, Election Day.

"This will really transform Palmer — bring it back," Etess said of the agreement, which the parties had negotiated for months.

Mohegan Sun Massachusetts, one of three projects vying for the one available casino license in the western Massachusetts region, would feature gaming and resort amenities, two hotels, a 70,000-square-foot water park and 300,000 square feet of entertainment, dining and retail space.

Blanchard said the payments to the town would shore up Palmer's fiscal stability and ease the burden on its tax-paying residents. The developer's spending on infrastructure improvements, he said, would include $14 million for municipal water systems, $6.4 million for sewers, $4.1 million for roads and $16.5 million on reconfiguring the highway interchange at Exit 8 of the Massachusetts Turnpike, site of the project.

The mitigation payments would enable the town to devote more than $1 million a year to economic development programs, to hire additional police, fire and emergency personnel and to finance a new public works garage, Blanchard said.

The $16 million in annual payments — an amount that would eclipse the $15.4 million in tax revenue the town expects to receive in the current fiscal year — includes a percentage of Mohegan Sun Massachusetts' gaming revenue equal to 0.25 percent of the first $400 million in revenue. If the casino's gaming revenue exceeded the $400 million mark, the town also would get up to 2 percent of the additional revenue.

"These payments represent the largest per capita and per household mitigation of any western Mass. proposal," Mohegan Sun Massachusetts said in a statement.

Mohegan Sun must now begin negotiations with towns that surround Palmer and may be impacted by the casino project, Paul Brody, the Mohegan gaming authority's chief development officer, said.

The other competitors for the western Massachusetts license are MGM Resorts International, which has secured a host community agreement and won referendum approval in Springfield, and Hard Rock International, which has an agreement with West Springfield, where a referendum is scheduled for Sept. 10.

Three other casino partnerships, including one led by Foxwoods Resort Casino, are competing for a separate license available in the Greater Boston area. Suffolk Downs announced this week that it had reached host community agreements with Boston and Revere, while Wynn Resorts has secured an agreement and a referendum approval in Everett.

The Foxwoods Massachusetts partnership is negotiating an agreement with officials in Milford.

The Massachusetts Gaming Commission is expected to award the casino licenses for western Massachusetts and Greater Boston next spring.